State budget update

The budget proposed last month by Gov. Arnold Schwarzenegger is slowly working its way through the Legislature and is being closely watched by Metro. Schwarzenegger’s budget has been criticized by agencies and transit advocates for steering too much money away from transit.

The State Senate has fixed that, to some degree. But Metro still believes the budget doesn’t do enough to protect transit funding beyond this budget year — a big problem considering that the state budget seems to be in crisis every year.

Metro officials are still working to estimate how many dollars the current Senate proposal would cost Metro and how the budget would impact the ability to do things such as issue voter-approved Prop 1B funds or contribute to the state’s share of the Expo Line.

Another reason the budget is an issue is because Metro appears to be facing a projected budget shortfall in the fiscal year starting July 1. Agency officials said last month that the deficit appeared to be about $251 million although the latest number, but recently said the shortage appears to be down to $180 million. It’s important to note the number is still in flux.

The latest budget summary from Metro’s government relations staff is after the jump.

The Board last month adopted an “oppose” position to the Governor’s budget proposal because it seeks to eliminate the sales tax on gas, which will permanently eliminate the funding sources for Proposition 42, including public transit. We appreciate Legislative efforts to restore some of the transit funding through the infusion of $400 million in one-time funding for the State Transit Assistance (STA) and for their support in the 75%/25% split on funds generated from the sales tax on diesel in favor of STA. Although we appreciate these efforts, we are still concerned with the dismantling of historical funding sources for public transit and the long-term financial impacts that will lead to reductions in service and potential job losses. We would like to work with the Legislature on budget solutions that could help with our funding challenges, including:

  • Support the distribution of the sales tax on diesel to be split 75% to STA and 25% to Intercity rail;
  • Allow counties with ready-to-go construction projects to receive an advance of
  • Proposition 1B Public Transportation Modernization Improvement and Service Enhancement Account (PTMISEA) funds ahead of other counties who have not drawn down prior year funding;
  • Include contingency language that would restore the sales tax if the excise tax is invalidated;
  • Ensure that any index methods that are considered be truly tied to the price of gas and not an estimate or proxy; and,
  • Authorize SCAG to establish Sustainable Communities Strategy (SCS) based eligibility rules for the new regional fee, but mandate the delegation of fee adoption, distribution and project selection fee to the county level transportation programming authorities.

Categories: Policy & Funding

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